For Texas couples who are planning on getting married, keeping certain assets like trust funds separate is important. This is because, should the couple later get a divorce, it is likely that any other property that the couple obtains will be split.
In most states, there are only a few types of property that are considered to be separate property. These assets include any real estate that one person owned before getting married, inheritances received from family members, gifts from spouses or other parties and pain and suffering compensation that was obtained through a personal injury lawsuit. Further, property can also potentially be designated as "separate" in a prenuptial agreement. Any other property or assets that are obtained by the couple will be considered marital property.
One way to avoid potentially have to split up a trust that was meant to be for one person is to ensure that the terms of the trust are very clear. For example, the trust should state that the trust funds and income should only be considered separate property and cannot be used to calculate alimony payments. Further, a person who has a trust should also never mingle the trust funds with other income, as this could cause the trust funds to become marital property.
When a couple decides that it is time to get a divorce, they will have to determine how they want to split their marital property. If one person argues that an asset is marital property while the other person claims that they had obtained that property before the marriage, a family law attorney may assist with proving that this is the case. For example, if a person had a trust fund that is now being argued over, the attorney may provide the terms noted in the trust, clearly showing that the trust belonged to the person prior to the marriage.